Parties

Initiator: Bank C (issuing bank in Country C)

Respondent: Company S (beneficiary in Country I)

Background

The Initiator (Bank C) is the issuing bank of a letter of credit issued subject to UCP 500 in February 2003. It was advised through an advising bank in country I. The Respondent is the beneficiary of the letter of credit. The Respondent presented documents through a bank (hereinafter called "presenting bank") in country I, which is not a party to this request for a DOCDEX decision.

The Initiator decided to refuse the documents on the basis of two discrepancies which it identified.

Documentation

Request for a DOCDEX Decision was submitted by the Initiator dated 30 July 2004, substantially as required by Article 2 of the ICC DOCDEX rules, ICC Publication No. 811. The request contains the summary of the dispute, the Initiator's view, a copy of the letter of credit, a copy of the bill of lading and the certificate of origin presented, correspondence in relation to the refusal of the documents, the subsequent arguments and a copy of the ICC Banking Commission Opinions R338 and R440.

Issues to be determined

Whether the Initiator was correct in refusing the documents due to the following stated discrepancies:

1. only four copies of invoice presented;

2. vessel's name in C/O [certificate of origin] differs from B/L

Analysis of the issues

Discrepancy 1: Only four copies of invoice presented)

The letter of credit contained the following requirement relating to the invoice under the section "documents required":

1. Signed commercial invoice in 3 originals and 2 copies indicating the L/C no. and Contract no.

Furthermore, the letter of credit indicated under the section "additional conditions" the following: "4. One additional copy of commercial invoice and transport document should be provided for our [issuing bank] file."

Thus, altogether three original invoices and three copies of the invoice are required under the letter of credit.

The documents were received by the Initiator on 25 April 2003 from the presenting bank with a cover letter which indicates that four invoices were attached. The cover letter is silent as to the number of original invoices and copies which were presented.

Whether the number of original invoices required (3) were presented or not is irrelevant to this decision, as this issue has not been questioned by the Initiator. Therefore, the question is whether a presentation of four invoices instead of six invoices, as required by the credit, is a discrepancy or not.

Sub-article 20 (c) (ii) of UCP 500 states: "Credits that require multiple document(s) such as 'duplicate', 'two fold', 'two copies' and the like, will be satisfied by the presentation of one original and the remaining number in copies except where the document itself indicates otherwise." This has been affirmed in ICC Opinions R338 and R440.

Paragraph 71 of ISBP 645 states: "The required number of originals and copies must be presented."

In a recent ICC DOCDEX Decision (No 235), where the issuing bank refused the documents on the basis of the following discrepancy: "Certificate of quality should be presented in 3 copies instead of 1 copy as L/C required", the Experts, based on the arguments above, came to the following conclusion: "The discrepancy raised by Bank I is valid within the framework of UCP, and the refusal is justified."

Based on the analysis above, the Experts came to the conclusion that the Initiator was correct in refusing the documents with regard to discrepancy 1 under "Issues to be determined" above.

The fact that the presenting bank, later and outside of the presentation period, did submit two additional copies of the invoice does not remedy the fact that an insufficient number of documents were presented.

Discrepancy 2: (vessel's name in C/O [certificate of origin] differs from B/L)

The bill of lading indicates the vessel name as "CSCL Yantai" whereas the certificate of origin indicates the vessel name as "CSCSL Yantai".

The Experts have not received copies of the other documents required under the credit, namely a copy of the packing list, certificate of quality and the beneficiary's certified copy of fax sent to the applicant of the credit.

The Experts did not think that a request for a copy of these documents was necessary, presuming that these documents did indicate the name of the vessel as stated on the bill of lading.

Having under review four documents which indicate the vessel's name to be "CSCL Yantai", as opposed to one document which indicates the name to be "CSCSL Yantai", the assumption that it is a typing error on this fifth document (the certificate of origin) is logical.

The fact that the shipping company issuing the bill of lading (C... S... C... L...) is a national carrier domiciled in country C (country of the issuing bank) gives a clear indication to the fact that "CSCL" is a prefix to the vessel sailing under the flag of that carrier. Therefore, the spelling on the certificate of origin is to be considered as a typing error. A single phone call to the carrier or a single check on the Internet invariably provides the same result: CSCL is part of most of the container vessels sailing in the name of that carrier.

Based on the analysis above, the Experts come to the conclusion that the Initiator was incorrect in refusing the documents with regard to discrepancy 2 under the "Issues to be determined" above.

Decision

The Experts conclude that the Initiator is correct in refusing the documents with regard to discrepancy 1 and is incorrect in refusing the documents with regard to discrepancy 2.

This decision is unanimous.